Ok, now before we get all bent out of shape over this, let's consider the example of the Amazon App. It allows you to purchase things in-app, or you can go to the Amazon website and purchase there. However, the "in-app" option does not go through Apple, and as far as I know, Apple gets no cut. Does this meet the requirements? It seems to me that it does.

I don't read this as Apple requiring that the in-app purchase be an in-app purchase that goes through the app store and Apple gets a cut of. Just that the app has an interface to purchase things without leaving the app. Apple offers the in-app purchases for developers who don't have the resources to host their own servers to handle in-app purchases, but it isn't REQUIRED, is it? The Amazon app certainly doesn't use it.

Am I mistaken?

the kindle app sends you to safari and the amazon website. the app only downloads books you bought on amazon.com. there has never been any kind of in app purchase.

Ok, now before we get all bent out of shape over this, let's consider the example of the Amazon App. It allows you to purchase things in-app, or you can go to the Amazon website and purchase there. However, the "in-app" option does not go through Apple, and as far as I know, Apple gets no cut. Does this meet the requirements? It seems to me that it does.

I don't read this as Apple requiring that the in-app purchase be an in-app purchase that goes through the app store and Apple gets a cut of. Just that the app has an interface to purchase things without leaving the app. Apple offers the in-app purchases for developers who don't have the resources to host their own servers to handle in-app purchases, but it isn't REQUIRED, is it? The Amazon app certainly doesn't use it.

Am I mistaken?

According to the now-enforced rules, if you sell content or subscriptions that are delivered to an iOS device, you *must* use the Apple in-app purchase API, which gives Apple their 30% cut. You are still allowed to sell content and subscriptions outside the app, and you may still use your own authorization system as is the case today. Only now, Apple is requiring you make it available with their API as well.

...which, I'm sorry, is still complete BS. Not only has Apple become the world's most expensive POS system in the world, they have also effectively become a "partner" in almost every service that wants to do business on iOS. Greed know no bounds to a corporation, and it sickens me to own Apple products.

This is all the more reason why competition from Android, Windows Phone, RIM and WebOS is vitally important. Apple is exploiting their dominance for greed, and is taking an unnecessary chunk of revenue away from writers, authors and publishers. So long as there is a vital alternative market, content providers have a say against these policies.

The iPad and App store are only there to earn money for Apple. It is understandable. What I don't understand is how Apple can require companies to give them a cut of everything their company does.

When I buy a car from Ford, they don't require every store I visit to give them 30% of all of my purchases just because I used the Ford to get to their store. It seems apps are the same way. The iPad or iPhone is the vehicle used to visit or buy apps. Those apps are like stores. They have things that people want. Why should those stores give Apple anything just because the person used an iPad or iPhone to get to that store? If Apple is storing the data that is being sold then I can understand them getting a cut. If the app vendor wants to send people elsewhere to buy things then it should be none of Apple's business if people purchase things outside of the Apple universe.

I use a Mac Book and visit web sites. I purchase things from Amazon and other vendors. Apple doesn't get a cut of all of my purchases on those other web sites just because I used something they built.

FWIW, I only stuff for my iPad through iTunes. If I have to buy media for an app through other means, I delete the app.

That's your choice, and you should be free to make it. Users and content providers should also have the choice whether to give Apple 30% of their revenue in order to do business. But alas, they do not.

And don't get something completely different into comparison. Credit cards companies make billions of people with their twisted system. They are not selling anything, they are not providing any kind of storage of data, they simply link accounts across the world.

Some people might well argue that the credit card companies are doing more for the customer than Apple. The credit card companies essentially maintain a vast, international network and have tremendous legal obligations to take care of.

Now, I can see where Apple has to pass along the credit card fees and a common markup for a middleman (like Apple) is 50%. This gets a reasonable fee to 6%, outside. For "shipping and handling", add 10% outside--and remember, this is done automatically, which is cheap. That makes a total of 16%, outside. This is nowhere near 30%.

Apple's policy doesn't even take into consideration the magnitude of sales. In other words, high volume sellers are effectively penalized and subsidizing low-volume sellers. I could see low volume sellers being charged 30%, but not high volume.

And don't get something completely different into comparison. Credit cards companies make billions of people with their twisted system. They are not selling anything, they are not providing any kind of storage of data, they simply link accounts across the world.

What the heck do you think in-app purchase is? Apple isn't selling the books through the Kindle store, Amazon is. Amazon provides the storage. Amazon has to keep track of who is authorized to read which book.

Unlike application sales, in-app purchases must be supplied by the application vendor, *NOT* Apple. Apple's only role in that transaction is to process the credit card at a 30% rate, over 10x the standard processing fee. That's it. The rest of the work goes back to the app vendor, who supplies the servers, storage and bandwidth to deliver the books to you.

They're not different systems. They're *IDENTICAL* systems, or at least accomplish the same task. The only difference is one takes an obscene amount of your transactions than the other.

Yes, Apple is clearly referring to its own in-app purchasing/subscription service when they refer to inside the app:
"All we require is that, if a publisher is making a subscription offer outside of the app, the same (or better) offer be made inside the app, so that customers can easily subscribe with one-click right in the app."

Where does Apple say anything about its own in-app service? As I said, you already get the same functionality described above in the Amazon app, which does not use the App Store at all. (Not the Kindle app, I'm referring to the general Amazon app.)

I haven't read the full statement from Apple, but it sounds to me like this is an interface/usability issue, not a "YOU MUST USE THE APP STORE FOR ALL TRANSACTIONS!" issue. I'll concede that it's arguable that Apple should be so heavy handed about a usability issue, but I don't think it's QUITE as nefarious as is being portrayed.

Apple provides much more to app developers who sell their software through the App Store -- storage of files, management of updates, the screening process which incurs costs Apple has a right to recoup, and, yes, the transaction fees.

Apple DOES NOT provide anything like that service to folks who sell *CONTENT* through their apps. Apple will not be storing the Kindle books, will not be providing updates to Kindle books, will not be screening the Kindle books. The *only* thing Apple will be doing when it sells a Kindle book is managing the transaction, akin to what a credit card or merchant company does. That is not worth 30% of the sale.

So, for doing NOTHING but processing the credit card, Apple is going to take 30% of the list price, which equals 100% of Amazon's margin on an ebook, as Amazon splits the sales price with publishers 30/70.

Can you really argue that for nothing but transaction costs, Apple deserves to take every penny of profit Amazon would make on a Kindle book sold to an iOS device?

If Apple's position is "if you're going to make money through our devices, we should, too," then the obvious rule to change here would be to set a minimum price for the sale of an application that in turn provides access to digital content purchased elsewhere. Make Amazon charge $4.99 for the Kindle app and have Apple take $1.50, that would be sensible. But to expect Amazon to hand over 100% of its share of the purchase price of a book sold to an iOS user is unreasonable.

No, they did not yet say this. But how far is it from saying a subscription offer outside of iOS must be matched inside iOS to saying the same for whole apps? Not very far, just one press release away.

Wow! That one press release would be "FTC Opens Antitrust Investigation".

Ok, now before we get all bent out of shape over this, let's consider the example of the Amazon App. It allows you to purchase things in-app, or you can go to the Amazon website and purchase there. However, the "in-app" option does not go through Apple, and as far as I know, Apple gets no cut. Does this meet the requirements? It seems to me that it does.

I don't read this as Apple requiring that the in-app purchase be an in-app purchase that goes through the app store and Apple gets a cut of. Just that the app has an interface to purchase things without leaving the app. Apple offers the in-app purchases for developers who don't have the resources to host their own servers to handle in-app purchases, but it isn't REQUIRED, is it? The Amazon app certainly doesn't use it.

Am I mistaken?

They can't offer links to out-of-app purchasing inside the app anymore. So Amazon has to remove the links.

From the press release: "In addition, publishers may no longer provide links in their apps (to a web site, for example) which allow the customer to purchase content or subscriptions outside of the app."

But it's not clear whether all apps tied to some kind of subscription must offer Apple's in-app subscription service.

Steve says: "All we require is that, if a publisher is making a subscription offer outside of the app, the same (or better) offer be made inside the app, so that customers can easily subscribe with one-click right in the app."

The use of the word "offer" makes it ambiguous. It's not clear if they're saying that the app merely has to meet offers made outside the app IF it has in-app subscriptions or if they're saying the app MUST have in-app subscriptions if there are subscriptions outside the app. The last part of the sentence ("so that customers can easily subscribe") makes it sound like the latter, stronger constraint is true but the rest of the press release makes it sound like the weaker constraint it true:

"Publishers who use Apple's subscription service in their app can also leverage other methods for acquiring digital subscribers outside of the app. For example, publishers can sell digital subscriptions on their web sites, or can choose to provide free access to existing subscribers. Since Apple is not involved in these transactions, there is no revenue sharing or exchange of customer information with Apple. Publishers must provide their own authentication process inside the app for subscribers that have signed up outside of the app. However, Apple does require that if a publisher chooses to sell a digital subscription separately outside of the app, that same subscription offer must be made available, at the same price or less, to customers who wish to subscribe from within the app. In addition, publishers may no longer provide links in their apps (to a web site, for example) which allow the customer to purchase content or subscriptions outside of the app."

Since the paragraph is addressed to "publishers who use Apple's subscription service" and they again say that the "same subscription offer must be made available" as if it's just a pricing issue, it looks like these constraints only apply if you're using Apple's subscription service and Kindle, Hulu and Netflix would be unaffected (although they'd have to remove links to their websites).

If Kindle, Hulu, & Netflix all dumped the app store in protest Apple would change this policy faster than it was implemented.

That would push me to Android for a mobile OS.

I can see three outcomes to this ploy by Cupertino:

One, everyone leaves the app store and customers are left angry and outraged - not at Apple, but at those companies for not being on their shiny new toys anymore. Customers lose, content creators and publishers lose, Apple wins.

Two, everyone stays on iOS and either raises the price of all sales and subscriptions to cover Apple's huge percentage, or remains where they are and takes a loss. Customers lose on higher prices, content creators and publishers lose with revenue loss, Apple wins in either case.

Three, Apple announces new subscription plans for both iTunes music and video, effectively competing against all forms of digital content (books, music, TV and movies) in any purchase model (individual, rental or subscription), and negates the need of even having Netflix, Kindle or Hulu on the platform in the first place. Consumers lose on choice, content creators and publishers lose almost an entire market, and, surprise surprise, Apple wins yet again.

So no matter how you look at it, Apple wins. Period. That's why this is such a brilliant business move for them. They will always come out on top, no matter how aggressively greedy they become.

anti-trust law says you can't use power in one market to muscle your way into another market. apple is using their market power in the mobile hardware/app store to exclude competitors in the e-book market

personally i think any government action will go no where like it did with Microsoft and technological advances will solve the problem in a few years.

Also, Apple has a history of accommodating government action. Jobs likes to freely innovate, not defend against antitrust concerns. If any charges are made, Apple will adjust in a quick settlement and move on.

Doesn't this mean Amazon just has to remove in-app purchasing completely? They can still do it entirely via their website just as long as the app itself doesn't load the website. The Kindle app just becomes a way to view your already purchased Kindle books. Do Netflix and Hulu even allow you to purchase subscriptions from within the app? (I'm not in the US.)

Apple's in-app purchasing tool has a limit on the number of items applications can offer for sale. In fact, it's only a few thousand -- maybe 4,000. Amazon sells hundreds of thousands of titles through its Kindle Store. Who gets to determine which of those hundreds of thousands of titles are discoverable through the in app sales system that is subject to Apple's 30% tax?

And would Amazon be able to provide some notice to users that the titles they can find in the in-app "store" are only a small fraction of what's available through the Web?

Again, the App Store does not operate on a fee for services model, it operates on a revenue sharing model. Those looking for loopholes in their developer agreement to allow them to hide revenue are cheating the system and sticking the honest developers who pay their 30% to support the running of the App Store with the bill.

One, everyone leaves the app store and customers are left angry and outraged - not at Apple, but at those companies for not being on their shiny new toys anymore. Customers lose, content creators and publishers lose, Apple wins.

There will be plenty of press releases by the publishers, Google, other tablet manufacturers and every single tech site, or technical part of every single newspaper in the world blaming Apple if Kindle leaves ( which it will). Customers will blame Apple and go elsewhere.

Amazon and Android will point to the 2 million books, as opposed to Apple's 200,000. Heck if Amazon wanted to play dirty it could ban publishers ( its a shop, not a publisher) who are also in iBooks. Or price them out of the market. Thats an anti-trust violation, but not nearly as bad as Apple's . If Apple is playing like a bully until the government intervenes - well 2(00) can play at that game. This is Apple against the world.

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Two, everyone stays on iOS and either raises the price of all sales and subscriptions to cover Apple's huge percentage, or remains where they are and takes a loss. Customers lose on higher prices, content creators and publishers lose with revenue loss, Apple wins in either case.

Thats not going to happen. Publishers have to have the same price. The iPad is not that important to Amazon that they will raise their prices by 43% across the board.

Quote:

Three, Apple announces new subscription plans for both iTunes music and video, effectively competing against all forms of digital content (books, music, TV and movies) in any purchase model (individual, rental or subscription), and negates the need of even having Netflix, Kindle or Hulu on the platform in the first place. Consumers lose on choice, content creators and publishers lose almost an entire market, and, surprise surprise, Apple wins yet again.

They already have done that - the 43% markup applies to Hulu, Kindle and Netflix ( and the company I worked for until they canned a project).

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So no matter how you look at it, Apple wins. Period. That's why this is such a brilliant business move for them. They will always come out on top, no matter how aggressively greedy they become.

Competition, save us!!!

They win until everybody abandons the platform because it has bog all books compared to the Android, and far less choice of content providers. Even if the iPad comes in good this year, it wont last.

This is hardball nonsense from Apple at a time when they need to be more agressive about selling hardware and not give a toss about content providers making them rich by adding value to their platform..

Not many credit card companies deliver new customers and deliver the goods to your doorstep. They just process a sale that someone else has worked to achieve.

Which is exactly what the application developer does when they produce an app for iOS. People don't want to make an in-app purchase because the application was approved by Apple, they want to make an in-app purchase because they have seen from the application itself that it is worthwhile.

They really poisonous bit here is that Apple demand that the in-app purchase version must not be more expensive than what can be bought elsewhere. Amazon don't even make 30% profit on a Kindle book, so even if they gave Apple 100% of their take, it still wouldn't satisfy Apple's greed.

There are only two outcomes here, either the Kindle app disappears from the app-store, which would pretty much kill the iPad dead. Or Amazon implement a two tier pricing structure, where when you buy a Kindle book from Amazon's web site it adds a special Apple tax (30%) to the price on purchase. I can't really see consumers liking that very much.

Extreme greed like this is good for nobody, not even Apple, and I can see this horribly backfiring. Android tablets are going to be everywhere this year and stuff like this will make them an easy choice for most people.

One, everyone leaves the app store and customers are left angry and outraged - not at Apple, but at those companies for not being on their shiny new toys anymore. Customers lose, content creators and publishers lose, Apple wins.

I don't think this is accurate. If there is a large scale migration of app developers who can't afford to pay Apple 30% on their sales to mobile customers (which, frankly, will be most content sellers, who rarely have that sort of markup on the goods they sell), then the relative value of the iOS platform as compared to platforms that do not have these restrictions, and which do still have Amazon and other vendors available, would tilt against Apple.

Apple and some people on here want to pretend that the benefits of the iOS platform stem only from Apple and flow only outward, that folks like Amazon, Hulu and Netflix do nothing but gain from iOS. But they also *contribute* value to iOS by providing good software and content at reasonable prices. Having Amazon, Hulu and Netflix on the iPad makes the iPad a better product, which benefits Apple in the form of more sales.

A viable software ecosystem depends on recognizing the mutual benefits accrued to both the platform builder and the software vendors. This new policy from Apple ignores this reality, and could harm the ecosystem.

Is it worth it to Amazon to stay on iOS if every book sold through the required in-app store is taxed by Apple in a way that takes away all of Amazon's profit margin? To say nothing of Hulu or Netflix, whose streaming services have profit margins of less than 30%, as well?

If Apple were to require in app purchase options with a cost that reflected the reality that *all* Apple was doing was managing the transaction -- say, 5%, then you'd hear no real murmurs of unrest about it. But to require payouts that meet or often exceed the margins that content sellers rely on for profitability? That's absurd.

... Apple is exploiting their dominance for greed, and is taking an unnecessary chunk of revenue away from writers, authors and publishers. So long as there is a vital alternative market, content providers have a say against these policies.

I challenge you to show me a system where a writer, author or publisher would get more than 70%, excepting from their own website. And of course, Apple is not taking away that ability in any way.

In traditional publishing, there are far more hands out to get paid along the way. If they want to get their 100% they can invest in the advertising, though whatever media, to get the word out. That costs significant bucks by the way.

The less content is available on app store, the less attractive platform becomes. Unlike iPod where apple had 90% share and could count on illegal songs to be on the iPod weather legal content is available on iTunes or not, for book, video and movies, if there is no content on iTunes, there is no easy way to put it there.

Just saying apple should be careful in strong-arming the content providers.

The iPad and App store are only there to earn money for Apple. It is understandable. What I don't understand is how Apple can require companies to give them a cut of everything their company does.

When I buy a car from Ford, they don't require every store I visit to give them 30% of all of my purchases just because I used the Ford to get to their store. It seems apps are the same way. The iPad or iPhone is the vehicle used to visit or buy apps. Those apps are like stores. They have things that people want. Why should those stores give Apple anything just because the person used an iPad or iPhone to get to that store? If Apple is storing the data that is being sold then I can understand them getting a cut. If the app vendor wants to send people elsewhere to buy things then it should be none of Apple's business if people purchase things outside of the Apple universe.

I use a Mac Book and visit web sites. I purchase things from Amazon and other vendors. Apple doesn't get a cut of all of my purchases on those other web sites just because I used something they built.

Flawed analogy. The brick and mortar store you drive to is the analog of the app store, not the car. Any dealership you buy your Ford from has the right to take some of the cost you pay Ford as their cut for running the store. You think dealers should sell cars as a public service because they didn't spend anything to make the car?

Does anyone know which apps are affected? Based on this phrasing: "...or provide free access to existing subscribers", it sounds like magazines that offer an app that can download the magazine if you are already receiving the paper version are okay. For example, is the Economist affected? Would Skype be affected? I am pretty sure the The Daily is affected. Anyone know what actually is affected?

Hmm... Skype. That is interesting... You don't really have a 'subscription' to Skype, as much as an account. Or is it really the same thing? Very good point.

Man, I love Apple. But this seems like a bone head idea. What's keeping these giants (Kindle Store, Hulu) from pulling their apps altogether and only making them available on Android and Win 7 deices? Then, I, as a consumer, would have to choose where to go....and Android would be my first bet. This is where the "closed" system starts to effect the consumer. until now, hasn't bothered me...but if I lose functionality out of my phone because of this...so long, Apple. I'll take my business elsewhere.

Not really the same thing at all. Think of Apple as a distributor, not a credit card company.

Apple's not the distributor if I buy a book through a Kindle app. Apple isn't storing the file, checking the file, serving the file, screening the file or sending out updates to the file. All they're doing is running the transaction and then passing all the work off to Amazon's servers. When it comes to in-app content purchases Apple is only a transaction service, not a distributor in any sense, and not an active participant in the process, as they are in the selling, storing, serving and updating of applications.

Apple's relationship to an in-app content purchase is identical to a merchant server's relationship to a real world purchase in which someone uses a credit card, except Apple is charing 10 times as much.